The Importance of Marketing

Chapter 1, Section 1.2

Key Term

• Utility

Think Critically…

• Take 2-3 minutes to brainstorm why prices drop when products become more popular…

• We will discuss shortly!

Why Marketing is Important…

1. Micro-level: It can ________affect your life

2. Macro-level: It provides the means for __________________to take place in the marketplace, thus helping the economy as a whole

Economic Benefits of Marketing• New and _______________Products:

• In a competitive marketplace, businesses try to create _________or _______________products at ________________prices than their competition.

• Example: Pepsi vs. Coke

Economic Benefits of Marketing, cont.

• Lower Prices:• Marketing activities ____________demand and

this helps to lower prices• When demand is___________, manufacturers

can produce products in _________quantities• Unit costs are___________

Economic Benefits of Marketing, cont.

• Added _____________and Utility:• _______________________forces companies to be

efficient and responsive to consumers

• Competition also forces companies to TRY TO ________________________ to a consumer’s shopping experience

• Example: U.S. Bank offers online banking, a 24- hour customer service hotline, and free check cards

Economic Benefits of Marketing, cont.

Utility• Definition: Added ____________in economic terms

• Utilities are the _____________of a product or service that make it capable of satisfying a consumers’ wants and needs

• Five economic ____________involved with all products • Form

• Place

• Time

• Possession

• Information

Form Utility

Example: • _________• spool of thread• three yards of cloth --------------------------- Some Value

Example:• creating a jacket

from these materials

-------------------------- MORE Value!

•Changing raw materials or putting parts together to make them more__________. (i.e., making or producing things)

Place Utility

• Involves having a product _________customers can buy it.• Businesses study consumer shopping ______________to

determine the most _____________and efficient _____________________to buy products.

• Examples:• ________• Retail Stores (Brick & Mortar)• Internet (Click & Order)

Case Study Example:

BlockbusterBlockbuster

They have retail stores and now Blockbuster

online!!

Time Utility• Having a product available at a certain

__________of year or a _________time of day

Examples:• Gold’s Gym staying open 24 hours

• Starbucks offering the pumpkin spice latte from September thru February

Possession Utility• The __________of a product for money

• There are many variations today: • Cash

• Personal checks

• _______________

• Layaway and Installment Plans (delayed possession for gradual payment)

• Each option adds__________, as it gives the customer greater flexibility (i.e., greater opportunity to BUY)

Information Utility

• Involves _________with the consumer

Examples:• Salespeople provide ________ by

offering features and benefits of products

• Advertising communicates ________about specials, how much a product___________, and sometimes where to buy it

• _________and labeling inform consumers about qualities and uses of a product

• Websites provide detailed information about their companies and their products

Review Questions…

• Which utility is added by drive-through windows at Starbucks?

• How does marketing help to lower prices?